Hertz - Ford to sell Hertz, wider variety of cars?

Just read in WSJ that Ford is about to sell Hertz to a group of investors. Not sure what that means to us; perhaps a wider selection of cars. But even now, I think Hertz has more variety of cars than other rental car companies tied to a car manufacturer.

http://biz.yahoo.com/rb/050908/autos_hertz_ford_wsj.html?.v=3

We may see less prestige collection vehicles (Jags, Rovers, Volvos) since they are owned by Ford.

Or we might see more, as Hertz is already adding GM vehicles (Cadillac STS, XLR, and Escalade) as well as Audis and Infinitis. It seems to be a growth area for Hertz (certainly sets them apart from the other nationals and much easier to deal with then the specialty exotic firms). One could see Saabs added and perhaps Benzes/BMWs.

We may see less prestige collection vehicles (Jags, Rovers, Volvos) since they are owned by Ford.

Err..., sorry Rover is not owned by Ford and never was, I believe it is now owned by a Chinese company Nanjing Automobile (Group) Corporation. They were negotiating with the Aministrator to acquire the company and were pretty close to doing the deal a few weeks back, I think it went through.

Err..., sorry Rover is not owned by Ford and never was, I believe it is now owned by a Chinese company Nanjing Automobile (Group) Corporation. They were negotiating with the Aministrator to acquire the company and were pretty close to doing the deal a few weeks back, I think it went through.

I believe that the poster meant Land Rover, and not Rover. The 2 are distinct brands.

Last I heard (Autoweek about a week or so back), Rover Automobiles had liquidated.

And yes, Ford owns the Land Rover brand, which they bought from BMW.

Last I heard (Autoweek about a week or so back), Rover Automobiles had liquidated.

And yes, Ford owns the Land Rover brand, which they bought from BMW.

SEA-Tigger

As usual you are right on the money!! ^

I agree,

Ford does own the LR brand, which it bought from BMW around 2000. BMW owned it for a couple of years.

Anyway, it should be interesting to see what happens to Hertz. They do rent many different brands not owned by Ford.

The prestige brands, Volvo, Land Rover, Jaguar and Aston Martin are all now owned by Ford and sit in the Premier Automotive Group (PAG) along with Ford's Lincoln and Mercury brands. I think Mazda may also be included in the grouping?

The prestige brands, Volvo, Land Rover, Jaguar and Aston Martin are all now owned by Ford and sit in the Premier Automotive Group (PAG) along with Ford's Lincoln and Mercury brands. I think Mazda may also be included in the grouping?

Mazda is not part of PAG, though they are part of Ford (who own a 33% controlling stake).

If Mazda had launched Amati brand to compete with Infiniti and Lexus, then chances are very good they would have been part of PAG and those vehicles would be Prestige options.

Overall I doubt much will change at first. They may switch car model contracts, but will still have the same levels. I could see them trying to improve hertz gold and to push harder into the non airport areas.

As long as "wider selection of vehicles" doesn't mean Hertz loading up on bland sedan leftovers just because they are cheap (insert mental image of various GM products here).

- RightD

The variety of import brands available at Hertz is one of the reasons I try so hard to keep renting there. Given that Hertz even at corp locations already stocks some brands that Ford has no ownership interest in, there shouldn't be any great impetus to change the model mix with the ownership changes. We could see the Ford-owned content go down, though, obviously. But Ford has to make some fleet sales somewhere, so maybe not. Thrifty isn't still owned by Chrysler, is it? (It's not if I recall.) But they still have Chryslers featured as the main models.

DEARBORN, Mich., Sept. 12, 2005 – Ford Motor Company (NYSE: F) announced today the execution of a definitive agreement with an investor group of leading private equity firms, under which Ford will sell all of the shares of common stock of its wholly owned subsidiary, The Hertz Corporation, in a transaction valued at approximately $15 billion including debt. The acquiring investor group is composed of Clayton Dubilier & Rice, The Carlyle Group and Merrill Lynch Global Private Equity.

Under the terms of the agreement, Ford will receive $5.6 billion for the equity of Hertz.

"This transaction reinforces our commitment to strengthening our balance sheet and investing in our core automotive business," said Executive Vice President and Chief Financial Officer Don Leclair. "Hertz is a world class company with an experienced management team. We look forward to working with the new owners and intend to maintain our strong commercial relationship with Hertz."

In connection with the transaction, Hertz plans to commence a cash tender offer for up to

$2.3 billion of certain of its outstanding debt securities; certain other Hertz debt will be refinanced.

The purchase of Hertz is subject to customary conditions, including applicable regulatory approvals, and is anticipated to be completed by year end.

J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and Goldman, Sachs & Co. acted as financial advisors to Ford, and Simpson Thacher & Bartlett LLP acted as the company’s legal advisor.

Ford Motor Company, a global automotive industry leader based in Dearborn, Michigan, manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company’s core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company.

Hertz operates the largest general use car rental business in the world and one of the largest industrial, construction and material handling equipment rental businesses in North America, based on revenues.

Given that Ford will probably just buy it back next year....any change would be shortlived. How many times have they bought and sold Hertz now?

As long as "wider selection of vehicles" doesn't mean Hertz loading up on bland sedan leftovers just because they are cheap (insert mental image of various GM products here).

I actually don't mind renting the new GM models: Malibu, Impala 06, G6, LaCrosse, Vibe, Cobalt. The ones I really dislike are from Chrysler, Neon, Sebring, Stratus/Cirrus, PT Cruiser; they are just awful.